Dear Minister

23 August 2011

The Hon Jenny Macklin MP
Minister for Families, Housing, Community Services and Indigenous Affairs
Parliament House
CANBERRA ACT 2600

Dear Minister

I am pleased to present the fifteenth Annual Report of the Indigenous Land Corporation, covering the period from 1 July 2010 to 30 June 2011.

The Report is made in accordance with a resolution of Directors dated 23 August 2011 and complies with the requirements of Section 9 of the Commonwealth Authorities and Companies Act 1997.

The Report includes the Corporation’s Report of Operations and audited consolidated financial statements for the reporting period in accordance with the Finance Minister’s Orders.

Section 9(3) of the Commonwealth Authorities and Companies Act 1997 requires that you table the report in each House of the Parliament as soon as practicable.

Yours sincerely

Shirley Mcpherson
Chairperson

Contents

Part 1: Overview 2

Chapter 1.1: Introduction: Chairperson’s Report 4

ILC Board Overview 8

The ILC Board – Marking a decade of Indigenous achievement 12

Chapter 1.2: Governance Overview 16

The Board 17

Audit and Risk Management Committee 17

Investment Subcommittee 18

Tourism Advisory Committee 18

Business, Employment and Training Committee 19

Subsidiaries 19

Chapter 1.3: Governing Legislation 21

Purpose 21

Enabling Legislation 21

Responsible Minister 21

Chapter 1.4: Strategy Overview 22

Our Priorities 22

Guiding Documents: 23

National Indigenous Land Strategy 23

Regional Indigenous Land Strategies 23

Program Overview 23

Land Acquisition 24

Land Management 24

Chapter 1.5: Financial Overview 25

Aboriginal and Torres Strait Islander Account 25

Land Account Financial Overview 25

Land Account Consultative Forum 25

Overview of Financial Results 26

Part 2: Our Performance 28

Introduction 30

Chapter 2.1: Performance achieved against Key Performance Indicators 32

Chapter 2.2: Performance achieved against deliverables 43

Properties Acquired 43

Properties Granted 53

Land Management Projects 63

Regional Land Management Projects 73

Training to Employment Initiative on ILC-operated Businesses 88

Part 3: Management Accountability 109

Chapter 3.1: Assisting Our Clients 110

Service Charter 110

Client Services and Complaints Handling 110

Information for Stakeholders 110

Consultation and working with stakeholders 111

Chapter 3.2: Corporate Accountability 112

Performance Management and Improvement 112

Strategic and Operational Planning 112

Risk Management 112

Operational (Internal) Audit Program 113

Evaluation Framework 114

Benefits Framework 117

Processes and Procedures 118

General Policies of the Australian Government 118

Fraud Control and Awareness Program 119

Participation in Forums and Submissions 119

Chapter 3.3: External Scrutiny 120

Appearances at Parliamentary Committees 120

Freedom of Information 120

Chapter 3.4: Our People 121

Day-to-day Administration 122

Employee Code of Conduct 122

Maintenance of Ethical Standards 123

Staffing Arrangements 123

Chapter 3.5: Accountability for Financial and Physical Resources 130

Management of Investment Funds 130

Asset Management 130

Insurance and Indemnities 130

Purchasing 130

Information and Communications Technology 131

National Disability Strategy

Occupational Health and Safety 132

Ecologically Sustainable Development and Environmental Performance 134

Part 4: Financial Statements 137

Appendices 220

Acronyms and Abbreviations 242

Index 243

Part 1: overview

Highlights for 2010–11

Ayers Rock Resort (ARR) at Yulara, NT, was acquired in its entirety for $300m. It is a large scale, tourism-based enterprise and the aim is to provide new Indigenous training and employment opportunities in Central Australia. A National Indigenous Training Academy will be established at Yulara following the successful acquisition, and Indigenous employment is targeted at 350 by the end of 2018.

Land acquisition and land management assistance enabled more than 1,400 Indigenous employment outcomes. Almost 5,000 Indigenous training outcomes were delivered through ILC-funded land acquisition and land management projects.

Fish River Station at Daly River, NT, was acquired for $13m in a major environmental collaboration with SEWPaC, The Nature Conservancy, Pew Environment Group and Greening Australia. The acquisition will help save threatened species, protect Indigenous sites of significance, rehabilitate land and create Indigenous Ranger jobs.

Construction started on a major $20m eco-tourism enterprise at Mossman Gorge, QLD, in association with Mossman Gorge Aboriginal Community. Indigenous jobs have been created during the construction phase and up to 70 Indigenous jobs are expected when operational by mid-2012, with 40 job guarantees already in place.

Chapter 1.1 – Introduction

Chairperson’s Report

Our achievements

The Indigenous Land Corporation (ILC) is committed to playing its part in Closing the Gap in Indigenous disadvantage by assisting Indigenous Australians to achieve social, cultural, environmental and economic opportunities and benefits through the operation of its land acquisition and land management programs. There is no doubt that 2010–11 will be remembered as a watershed year in the history of the ILC in this regard. It was a year in which the ILC completed, in dollar terms, its largest ever Indigenous land acquisition with the internationally renowned Ayers Rock Resort (ARR) passing into the Indigenous estate. In doing so, the ILC Board continued to put into practice its vision of working with Indigenous partners, industry and government agencies across Australia to facilitate Indigenous economic development and provide training that leads to real jobs.

This will be my final report as Chairperson, as I have not been reappointed as a Director of the ILC Board. Other Directors who have not been reappointed are Kevin Driscoll, Max Gorringe and Evonne Goolagong-Cawley. I congratulate Ian Trust, Sam Jeffries and David Baffsky on their reappointments by Minister for Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) the Hon Jenny Macklin and I know that they will provide invaluable expertise and corporate knowledge for the new ILC Board. As Chairperson of the ILC for the past 10 years, it has been a privilege to serve as a Director and I thank the other outgoing Directors for their work and devoted years of service to the organisation. In particular, I would like to thank Kevin Driscoll who has served tirelessly on the Board for 13 years and has played a crucial role in the establishment of ILC-operated pastoral businesses so that they can provide badly-needed employment and training opportunities for Indigenous people in regional and remote Australia. The ILC is a unique, national Indigenous organisation in that it is a Statutory Authority but it is not budget-funded by government. I am proud of what the ILC has achieved during my term as Chairperson and I strongly believe that it has played a crucial role in Closing the Gap in Indigenous disadvantage across the country and will continue to do so for many years to come. I know that I leave the organisation in great shape to carry out its statutory functions.

It is against this background that, on behalf of the ILC Board of Directors, I am pleased to introduce our 2010–11 annual report.

Acquiring and managing land

Providing a sustainable land base for Indigenous Australians continued to be a priority for the ILC.During the year, the ILC granted a total of 12 properties to Indigenous organisations that demonstrated the capacity to own and manage land to achieve sustainable benefits for Indigenous people across all states and the NT. Ten more divestments are scheduled for next financial year.

During 2010–11, the ILC acquired five new properties. The Board approved acquisition of a further seven properties, but these were not settled during the reporting period. The number of properties purchased by the ILC since its establishment has risen to 236 with an area of almost 6.2 million hectares.

Twenty-seven new land management projects were approved in 2010–11, of which 19 were from applications while eight were developed as a result of the ILC identifying strategic opportunities. As at 30 June 2011, the ILC was managing 125 land management projects.

Total spending on carrying out the ILC’s land acquisition and land management functions was $175m.

Assisting Indigenous economic development

In recent years, the Board has implemented its vision that the pastoral and tourism industries in regional and remote Australia are areas of significant opportunity for delivering economic benefits through the creation of enterprises and real jobs for Indigenous people. The challenge for the Board was to identify where these strategic opportunities might exist and how to structure sustainable projects to take advantage of those opportunities.

There was no better example of this strategic approach than the acquisition of ARR. More than two years ago, the possibility of acquiring the resort was discussed by the Board. It was obvious ARR had the potential to provide significant opportunities for Indigenous job creation across a wide variety of industries, skills and professions in a region where Indigenous unemployment was entrenched and there was not a clear future for young Anangu people in terms of education, training and employment opportunities. The Board also saw the purchase as providing a catalyst to drive our Indigenous training to employment strategy and use ARR as a hub to revitalise Indigenous Tourism across Australia. The Board set about oversighting an exhaustive two-year due diligence process which investigated ARR, its operations, financial viability, potential benefits, infrastructure needs and human resource requirements. The end result of two years of hard work and planning was that, in May 2011, the ILC announced that it had acquired Ayers Rock Resort, in collaboration with Anangu traditional owner business group Wana Unkanytja, in its entirety for $300m.

Some 104 square kilometres of culturally important land has been returned to the Indigenous estate along with all the resort hotel accommodation, the Yulara airport, and other tourism-related infrastructure. The way is now open to develop the resort as a national and international showcase for Indigenous tourism, culture, employment and training. The ILC Board has set an ambitious target of 350 jobs at the resort to be taken up by Indigenous people by the end of 2018. Additionally, the ILC will establish a National Indigenous Training Academy at Yulara so up to 200 Indigenous people each year can come to ARR to receive accredited training and work experience in the tourism and hospitality industry. Importantly, each graduating trainee will be offered a job at ARR or a partnering hotel elsewhere in Australia.

This commitment, to maximise Indigenous training and employment opportunities, has been repeated in the development of a $20 million Indigenous eco-tourism centre at Mossman Gorge, north of Cairns. For years, the Mossman Gorge Aboriginal Community, located at the entrance to world-heritage-listed tropical rainforest, had a vision of creating jobs and income from the 500,000 tourists that visit the gorge each year. In recent years, the ILC has shared that vision with the community. After a considerable planning and approval process, construction work began in late 2010, of a world-class visitor and interpretive centre which will provide new cultural and environmental experiences for people who visit the gorge each year. The new centre will provide up to 70 Indigenous jobs in the tourism high season when construction is completed early in 2012. The ILC’s other strategic tourism project, Home Valley Station, continued to deliver badly-needed accredited training and employment for Indigenous people in WA’s east Kimberley region. This financial year, Home Valley hosted 20 participants through its residential training program and employed 12 Indigenous staff in areas such as hospitality, front of house, room servicing, administration, tour guiding, landscaping and ground maintenance, horticulture and a range of pastoral-based tourism activities.

Indigenous employment in the pastoral industry

Almost three years ago, the ILC embarked on an ambitious strategy to create training-to-employment opportunities on the 15 ILC-managed commercial cattle and sheep properties and its Home Valley Station tourism venture. Over that time, 126 people graduated from their 12-month traineeships, 92 were placed in ongoing employment and Indigenous employees on those businesses increased to 45%.

In June this year, the Board approved an $8.6m three-year extension of the strategy following a very positive external evaluation. The new funding includes a new flagship initiative for cadet property managers who will become future Indigenous leaders in Australian agriculture. The funding also provides for an initiative with Fletcher International Exports, to train up to 40 Indigenous shearers each year at the ILC’s Merriman Shearing School near Brewarrina, New South Wales.

Early in 2011, the Minister for Families, Housing, Community Services and Indigenous Affairs (FaHCSIA), the Hon Jenny Macklin visited Arnhem Land to officially open the ILC-funded Gunbalanya Station and Meats employment and training project. I was grateful to Minister Macklin for travelling to this remote community and I could see that she was delighted to meet with and talk to our 28 Indigenous workers and trainees. She was able to hear first-hand the difference this enterprise is making to their everyday lives and those of their families. I stood with the Minister as people shared their stories of a sense of purpose in coming to work and learning new skills.

Access to and protection of cultural and environmental values

The ILC’s land acquisition and land management activities delivered significant cultural and environmental benefits to Indigenous people in 2010–11. The ILC Board continues to be mindful of the need to maintain a balance between assisting Indigenous people to derive an economic gain from land ownership and use, while supporting the protection and maintenance of cultural and environmental values. In August 2010, the ILC collaborated in the purchase of Fish River Station, a 180,000 ha property 150 km south of Darwin, as a major nature reserve of national significance. It is home to fourteen migratory species protected under international agreements and seven nationally threatened species. The $13m property was purchased with $8.6m from SEWPaC, Caring for our Country program, $1.4m from the ILC and $3m from the conservation not-for-profits, The Nature Conservancy and Pew Environment Group through Greening Australia. The ILC is managing the property in collaboration with Traditional Owners through the NLC to identify and protect environmental and cultural sites of significance and divest to an appropriate Indigenous organisation. The purchase has created new jobs for Indigenous people in controlling weeds and feral animals, caring for threatened species and fire management.

In February 2011, the ILC submitted its Heritage Strategy to SEWPaC for presentation to the Australian Heritage Council and is awaiting feedback on the strategy.

Closing the Gap

During the year, it was pleasing to see a major initiative in Closing the Gap in education get under way at Weipa on Queensland’s Cape York. The ILC is constructing a new secondary school residential campus on behalf of FaHCSIA that will be home to around 120 students from Far North Queensland Indigenous communities. The new campus will operate in conjunction with the Western Cape College, already established in Weipa. The new campus will improve access to education for Indigenous students and is an important investment in helping to increase the number of Indigenous students attaining a Year 12 qualification. The facility is being constructed by the ILC on land gifted by Rio Tinto and will be operated by an organisation to be selected by FaHCSIA.

Board and staff

I am proud of the achievements of the ILC in 2010–11 and wish to express my thanks to my fellow Board members for their leadership and generous commitment of time, energy and expertise in guiding the important work of the ILC. I would also like to thank ILC General Manager, David Galvin, employees of the ILC, and those employed in ILC-operated businesses, and now at Voyages Indigenous Tourism Australia, for their continued dedication and hard work in ensuring the proper performance of ILC programs and projects and providing effective assistance to Indigenous Australians. I would also like to thank Indigenous organisations and individuals who have worked with and for the ILC to secure lasting outcomes for Indigenous peoples across Australia.

It has been a privilege to represent Australia at the United Nations Permanent Forum on Indigenous People and to communicate the good work of the ILC to other Indigenous organisations across the world. Finally, I would also like to thank all the commonwealth, state and territory government ministers and officials I have worked in collaboration with over the past 10 years to further the betterment of Indigenous people across Australia.

Shirley McPherson
Chairperson

v

ILC Board Overview

Ms Shirley McPherson, Chairperson.

Born in Perth and raised in the Murchison region of WA, Ms McPherson is a chartered accountant. Ms McPherson has held senior positions in the private, government and university sectors and has a wealth of experience at the regional, national and international levels of government in program delivery and private business development.

Ms McPherson has worked as a consultant to the mining industry in negotiating land-use agreements in the Pilbara and Goldfields areas of WA, was the Chair of the Aboriginal Development Corporation, is a past director of the Indigenous Business Network, has worked as a mediator for the National Native Title Tribunal and is a past director of KPMG Management Consulting Services.

Ms McPherson is a member of the Australian delegation to the United Nations Permanent Forum on Indigenous Peoples. Other professional and key associations held include:

• Associate Institute of Chartered Accountants in Australia;

• Certified Practising Accountant – Australian Society of CPAs;

• Member of the Pastoralists and Graziers Association of WA on behalf of the ILC;

• Member of NT Indigenous Economic Development Forum;

• Appointed to the Australian Government’s Northern Australia Land and Water Taskforce;

• Appointed to the Tourism Quality Council of Australia board;

• Director of the MRM Community Benefits Trust Board; and

• Member of WA Premier’s Public Sector Management Awards

Ms McPherson was appointed to the ILC as Chairperson in August 2001 and reappointed in September 2007 for a further four years.

Mr David Baffsky, AO

Mr Baffsky is Honorary Chairman (formerly Executive Chairman between 1993 and 2008) of Accor Asia Pacific, the largest hotel and tourism company in Australia and the Asia Pacific region. The company employs more than 7,500 people in Australia, and launched a pioneering Indigenous employment program with the Australian Government.

A graduate in law from University of Sydney, Mr Baffsky was the founder of Tourism Asset Holdings Limited and is a life member of the Tourism Task Force. He was a member of the Australian Government’s Round Table on Sustainable Development and was a member of the National Tourism Infrastructure Investment Consultative Group. He is a member of the Business-Government Advisory Group on National Security. He was Co-Chairperson of the National Indigenous Leadership Group for Tourism. He was a member of the Australian Government’s Beef Management Quota Panel. Mr Baffsky works with a number of charitable and non-profit groups. In 2005, he was appointed a Trustee of the Art Gallery of New South Wales and is Chairman of the Gallery’s Risk Management Committee.

In June 2001, Mr Baffsky was made an Officer in the General Division of the Order of Australia. The award was made for his “service to tourism, particularly in relation to industry development, provision and employment generation, and to the community through medical research, humanitarian relief and social welfare organisations”. In 2004, Mr Baffsky was awarded Asia Pacific Hotelier of the Year.

In 2007, Mr Baffsky was appointed to the Australian Government’s Northern Australia Land and Water Taskforce and the Prime Minister’s Community Business Partnership.

In 2008, he was appointed a Director of Ariadne Australia Limited and he joined the Board of Singapore Airport Terminal Services Limited. In 2009, he was appointed Chairman of Ariadne Australia Limited and a Director of Sydney Olympic Park Authority. In 2010, he joined the board of S Daniels Plc and in 2011 was appointed Chairman of Investa Funds Management Limited.

Mr Baffsky was appointed to the ILC’s Board in August 1999 and reappointed in September 2007 for a further four years.

Mr Max Gorringe

Mr Gorringe is Station Manager at Elsey Station in the NT where he lives with his family. Mr Gorringe has been involved in the cattle industry all his life. His parents worked as drovers for the Kidman Cattle Company, and Mr Gorringe worked for Kidmans after leaving school and into his early twenties.

After marrying, he and his wife lived and worked on cattle stations in the Channel Country of far south west Queensland. In 1990, they moved to the NT, where Mr Gorringe worked as head stockman and overseer.

Mr Gorringe enjoys the challenges of managing an Aboriginal station. He gets great satisfaction from Elsey Station’s achievements over the time he and his family have been there, noting that the station’s Traditional Owners are very proud of where Elsey is heading.

Mr Gorringe has been involved in the Roper River Landcare Group, as Chairman and then member, the Mataranka Bushman’s Carnival and the Gulf Bushfire Council.

Mr Gorringe is a member of the Mataranka Water Advisory Committee.

Mr Gorringe was appointed to the ILC’s Board in October 2005 and reappointed in September 2007 for a further four years.

Mr Ian Trust

Mr Trust is Executive Chair of the Wunan Foundation, an East Kimberley Indigenous organisation whose objective is to assist Indigenous people to help themselves. Wunan does this by using its commercial investments to produce outcomes in employment and training for Aboriginal people of the East Kimberley, as well as building the capacity of Indigenous organisations to provide a better service to their members.

He has a strong and coherent vision of a better future for Indigenous people in the region; a future beyond welfare and government dependency. Mr Trust has worked tirelessly to progress this vision through initiatives such as Wunan and Kimberley Group Training which he was instrumental in setting up.

In addition to the ILC and Wunan, Mr Trust is also a member of a number of national, state and regional boards, including Indigenous Business Australia, Kimberley College of TAFE, Kimberley Group Training, WA Aboriginal and Education Training Council and a member of Kimberley Futures, the social development arm of the Kimberley Land Council.

Mr Trust was appointed to the ILC’s Board in October 2005 for two years and reappointed in September 2007 for a further four years.